Capitol Alert

Senators apply new pressure on oil industry as gas prices rise

In this Feb. 27, 2015 photo, a cyclist rides by a sign at a gas station in Los Angeles posting the latest gas prices.
In this Feb. 27, 2015 photo, a cyclist rides by a sign at a gas station in Los Angeles posting the latest gas prices. AP

California senators investigating the recent surge in gas prices are escalating pressure on oil industry executives.

Sens. Jim Beall, D-San Jose, and Ben Hueso, D-San Diego, demanded in a letter Thursday that companies provide more information about their operations, including maintenance, outages and price spikes.

The inquiry to the chiefs of seven companies, including Ben van Beurden of Shell, John S. Watson of Chevron and Rex W. Tillerson of Exxon Mobil, follows a March legislative hearing after a pair of refineries, Exxon Mobil in Torrance and Tesoro in Martinez, went offline due to an explosion and labor dispute.

A recent report by Consumer Watchdog, a Santa Monica-based group, asserts that refiners are gouging customers by keeping low gasoline inventories. Oil industry groups contend there’s nothing unusual about the way the market reacted to the outages.

The senators want to know whether the market is competitive enough to keep prices low.

Since the hearing, they note that the state has experienced another retail price increase related to new refinery incidents. The average cost of a gallon rose from $3.10 in mid-April to $3.72 on Friday, according to GasBuddy.com.

“Such price spokes cost Californians dearly,” they wrote, after posing a series of questions. “Why, when one of your competitors experiences a refinery outage, do retail gasoline prices increase, in general?”

The questions could be a precursor to subpoenas, something that billionaire environmentalist Tom Steyer recently suggested to Senate Democrats. On Tuesday, he appeared at a Chevron gas station in San Francisco.

“As everyone knows, the oil companies have been charging Californians up to $1 billion per month more for gasoline than if we paid the national average,” he said. “It’s time to put an end to the Big Oil giveaway, and start giving Californians a fair shake.”

Christopher Cadelago: (916) 326-5538 @ccadelago

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